The Office of the Comptroller is responsible for the development and submission of the Statewide Cost Allocation Plan (SWCAP) under the provisions of Title 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
The SWCAP is a statistical method of allocating central government costs to the state agencies that receive central government support services.
These indirect costs represent expenditures incurred for such central services as accounting, payroll, purchasing, personnel, budget, etc. These costs are not billed to agencies because they generally are not easily measured and/or do not readily lend themselves to billing. Although these indirect costs are not owed, they should be included in your agency’s departmental indirect cost plan (if one is prepared) so that applicable overhead may be charged to federal grants. To the extent that agencies include the indirect SWCAP costs in their federal programs, corresponding state general fund dollars can be allocated elsewhere. Thus SWCAP maximizes the use of federal dollars, “freeing” state general fund resources for other uses.
Since these costs are not directly billed, they are allocated using methodology prescribed by OMB A-87. The actual allocation function is performed by consultants and the Federal Grants/Cost Allocation Unit. The coordination of gathering data, information collection/preparation, etc. on the central service costs centers is assigned to staff within the Division of Accounts and Reports. The basis for allocation of the central service cost center expenditures is specific to each cost center. For example, the Comptroller’s services are allocated based on the number of transactions that an agency processes through the central accounting system. Human Resources services are allocated based on the number of full-time equivalents.
These are central service costs that are billed. Section II costs include those that are generally more easily measured and are usually based on demand usage by the agency. This is any central service cost which user agencies actually pay in one form or another. For those central services directly billed to user agencies, a rate is established to recover the full cost of the operations of a particular central service cost center. However, OMB A-87 disallows certain costs from federal reimbursement. For this reason, as well as other OMB A-87 reconciling factors, there are normally differences between the full (and actual) cost of a central service operation and what is allowed under OMB A-87.
Note that Section II billed costs are “direct” costs to agency programs. This means that if the agency program is funded by federal funds, normally 100% of a specific program’s share of the billed “direct” cost is allowable for federal participation.
Resources and guidance to help Commonwealth of Massachusetts departments reconcile and report on federal funds received.
VISIT PAGEThis Administrative Bulletin describes the policies and procedures governing the assessment and collection of fringe benefits, payroll taxes and indirect costs for all programs and activities of the Commonwealth as required by M.G.L. c. 29, §§ 5D and 6B.
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